SOLARINDIA Q2 FY26 earnings call.
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Revenue
₹2,082 Cr
verification pending
Revenue YoY
21%
reported change
EBITDA
₹582 Cr
latest reported figure
Source
bse pending
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Solar Industries India delivered record Q2 performance with revenue of 2,082 crore (+21% YoY) and PAT of 361 crore, driven by defense revenue crossing 500 crore for the first time in a single quarter. The defense segment posted 57% YoY growth backed by a robust 15,500 crore order book with commercial Pinaka rocket sales commencing from Q3. International business hit highest-ever quarterly sales of 960 crore (+21% YoY), aided by geographic diversification across South Africa, Turkey, Ghana, and Nigeria. Management guided for 3,000 crore annualized defense revenue and 1,000 crore quarterly defense run-rate within two quarters, underpinned by 155mm shell commercial production starting Q4. H1 capex of 760 crore against guided 2,500 crore may see some deferment due to monsoon disruptions. Key risks include domestic mining demand weakness from extended monsoons impacting Coal India volumes and intensifying competition in loitering munitions from new domestic players.
Colored figures show movement against the previous available record.
Guidance to track
- Company expects to cross 1,000 crore quarterly defense revenue run-rate in next two quarters and reach annualized guidance of 3,000 crore for FY26.
- Commercial sales of Pinaka rockets will start from Q3 FY26, providing significant growth catalyst for defense segment.
- Trial production of 155mm shells has started with technical qualification underway; commercial production expected to commence from Q4 FY26.
- Company targets approximately 15% annualized growth in international explosives business, with new markets in Australia and Kazakhstan expected to become operational in 6-12 months.
Risks flagged
- Coal India and infrastructure mining activity was severely impacted by record monsoon rains in Q2. Coal India volumes dropped significantly, affecting explosives demand. Recovery depends on Q3-Q4 mining activity normalization.
- H1 operating cash flow was 95 crore versus 545 crore in previous year H1, significantly below historical averages. Working capital increased due to defense production ramp-up and slower collections from domestic customers.
- New domestic players like Hyderabad-based companies are entering loitering munitions space and winning trials. Company's Barastra counter-drone system faced successful competitor trials; market dynamics are changing with multiple qualified suppliers.
- Management indicated possible deferment of FY26 capex guidance of 2,500 crore due to monsoon-related construction delays. Final capex numbers will be shared at year-end, creating uncertainty on deployment timeline.
Key quotes
- We believe that from Q3 commercial sales of Pinaka will start at the same time the orders which we have generated for other products will also start ramping up from Q3. That's why we mentioned from Q3 we will see a significant growth from defense.
- Out of almost 15,500 crores, almost 8,000 crores is from international markets and we are likely to receive more orders as we move ahead. So there is definitely a big shortage of these products in the global ammunition markets.
- The margin for the quarter stands at around 28%. We are very happy to announce that we have performed as guided at the beginning of the year. As far as margins are concerned on quarter-to-quarter basis, we operate in so many different sectors and geographical environments. So the average margin and the potential what we have covered for this year stands at around 27%.
- We cannot provide any specific quantum which we are looking for [for new defense orders]. These things will improve from Q3 and Q4 we should be able to reach to the targeted levels of around 90 days of working capital so we don't see much problem on that side.
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